Perry revives old Social Security debate

Texas Gov. Rick Perry, who some believe has surged in the polls because of his straightforward approach, talks with Harlan Wright, left, before speaking to local Republicans on Thursday in Jefferson, Iowa. (AP Photo/Charlie Neibergall)

By Joe HolleyHouston Chronicle Political Editor

If Rick Perry wanted to start what he calls “a national conversation” about Social Security, he certainly got his wish. Commentators, the media and his fellow candidates all have homed in on his Ponzi scheme vilification of the venerable government program, his insistence that it’s a “monstrous lie” perpetrated upon young Americans.

At the Tea Party/CNN debate in Monday night in Tampa, Fla., chief rival Mitt Romney sought to fasten Perry to the incendiary language of his book Fed Up. The governor resisted — as he has for some weeks now — by claiming that “we ought to have a conversation.”

Romney interrupted.

“We’re having that conversation right now, governor,” he said. “We’re running for president.”

It actually is a conversation of long standing. Despite the old saw that the federal retirement program is the “third rail” of political discourse, to be avoided by any temperate candidate, it regularly has been a hot topic of debate.

Former House Speaker Thomas P. “Tip” O’Neill, D-Mass., an urban politician who knew about third rails, coined the metaphor, but politicians have been sniping at the program since its creation in 1935, says Eric Kingson, a professor of social work at Syracuse University and an adviser to the 1982 National Commission on Social Security Reform.

“It was Alf Landon, the Republican presidential candidate in 1936, who called payroll tax contributions worthless IOUs,” he said. “There have been ongoing criticisms and attacks ever since.”

Ponzi label resurfaces

Even the Ponzi scheme label is not new, says Andrew Achenbaum, a University of Houston historian who specializes in old-age issues.

“It’s been around at least since the ’80s,” he said, tracing its connection to Social Security to former Commerce Secretary Pete Peterson.

In tandem with the frequent attacks was growing public support for Social Security through the decades, said Kingson, who also is co-chairman of Strengthen Social Security Campaign, a coalition of labor, social service and religious groups. That support, he noted, prompted President Dwight D. Eisenhower to issue a warning in 1954 to his fellow Republicans:

“Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H.L. Hunt (and) a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible, and they are stupid.”

A half-century later, President George W. Bush dared brush against the electrified rail. Not long after winning re-election in 2004, he embarked on a national tour to build support for privatizing the program. His proposal drew fierce opposition from Democrats.

The symbolic finale of Bush’s tour was in Galveston, where county employees in 1981 withdrew from the Social Security system and began relying on individual retirement accounts.

Matagorda and Brazoria counties also withdrew from Social Security before Congress ended the option.

Bush — and more recently Perry and Herman Cain — touted the so-called Galveston Plan as a model for the nation, although several studies provide few definitive conclusions about its effectiveness.

Hazy results

A federal General Accounting Office report in 1999 concluded that Social Security would have provided low-income workers higher retirement incomes than the Texas county plans. It also found that those who earned the median wage, while initially receiving higher benefits under the alternative plans, also would have received larger benefits under Social Security between four and 12 years after retirement.

“It’s a great plan for a high-wage worker who’s worked 35 or 40 years,” Kingson said. “It’s also a great plan if you drop dead early.”

“I think it’s scalable,” he said. “I would weight it in favor of lower-income people on a national basis and make some other changes, but I certainly believe it’s scalable.”

Privatization plan

Gornto testified before Congress in 2005 on “how the Galveston Plan could be a model for America,” but Bush’s reform effort that year ultimately fizzled.

That has not stopped conversations about Social Security’s shortcomings. Romney has called the Texas governor’s critique a “disqualifying position,” but he has advanced his own plan for privatization.

In his own book, No Apology, Romney contends that individual retirement accounts “would allow today’s wage earners to direct a portion of their Social Security tax to a private account rather than go entirely to pay the benefits of current retirees, as is the case today.”

Achenbaum contends Romney, Perry and other critics of Social Security misrepresent the basic nature of the program. It was established as a universal system of social insurance, not an individual investment account, he said.

“It was based on the idea,” he said last week, “that we all share common risks — old age, invalidism, unemployment. It took Franklin D. Roosevelt, the most privileged of privileged

Americans, to realize the common vicissitudes of life and that we need certain protections. The reason it works is because it’s a program to which we have all contributed.”

Perry in recent weeks has begun to calibrate his eyebrow-raising critique of Social Security, insisting now that he does not want to abolish the program but reform it for younger people.

‘Broken system’

Writing in USA Today on Monday, he insisted its finances must be made whole to protect retirees and those about to retire and to make it viable “for generations to come.”

“Social Security is a broken system that needs to be fixed, and anybody who says it doesn’t is doing a grave injustice to the citizens of this country,” Perry spokesman Mark Miner says regularly to reporters.

Perry has surged in the polls, in large part because many voters share his view of Social Security and admire his straightforwardness, said Matthew Dowd, a former adviser to Bush.

“It could be like the old story of Br’er Rabbit,” Dowd wrote recently in the National Journal. “Perry says, ‘Oh please, please, don’t throw me in the briar patch.’ And in the end, he comes out ahead, while the Washington pundits and campaign operatives come away shaking their heads asking, ‘How did that happen?’ ”

Kingson thinks otherwise and used the words of John Wayne in the original True Grit to underscore his warning to Perry: “You do it, and it’ll be the biggest mistake you ever made, you Texas brushpopper.”